Higher tax bills to pay for new North of Tyne mayor
Warning for rest of the region if the North of Tyne breaks away
WITH the North of Tyne preparing to break away, a leading business group has warned about the long-term economic prospects of the rest of the region.
The North East England Chamber of Commerce has accused Gateshead, Durham, South Tyneside and Sunderland of lacking a “clear direction”.
Newcastle, Northumberland and North Tyneside are in the process of establishing a new combined authority after signing a devolution deal with central government.
Worth an initial £600m over 30 years, the reform will see the new North of Tyne (NTCA) granted a range of powers over education, planning and growth, as well as the creation of an elected mayor.
The NTCA authorities plan to leave the North East Combined Authority (NECA) in the coming months, at which point it will be up to the four remaining southern authorities to decide how they arrange their affairs.
With the NTCA region pressing ahead with devo and the prospect of a full North East devolved body seemingly a remote possibility after talks collapsed in 2016, the future of the southern half of the region remains unclear.
Responding to the North East Combined Authority’s draft budget, Ross Smith, from the NEECC, said the Chamber were still holding out hope for a wider North East devo deal but warned about the economic impact of standing still.
He wrote: “The context for this consultation is somewhat strange, coming alongside a separate consultation on whether to split NECA in order to pave the way for devolution to North of Tyne.
“The Chamber previously supported devolution to NECA as a whole and is disappointed that this was ultimately rejected by NECA members.
“In light of this, we are strongly supportive of those authorities that are ready to do a devolution deal being enable to go ahead.
“In the short term this will support delivery of the North East LEP’s Strategic Economic Plan, and in the longer term we hope it will be a step towards devolution across the region.
“We remain concerned, however, that the other four members of NECA have not set out a clear direction for how they intend to take forward the activity to support economic growth that NECA was established to focus on.
“Therefore, while we understand that next year’s budget must inevitably reflect what is described in the paper as a “transitional year”, it is a far from satisfactory position that we find ourselves in.”
In response, a NECA spokesperson said: “Our ambition to provide the best possible conditions to boost growth across the North East remains.
“All local authorities across the region will continue to work together to create more jobs, investment and increase living standards, ensuring the North East is an excellent location to do business, live and prosper.”
As part of the formal process to establish the NTCA, NECA will have to vote to allow the three authorities to go their own way, meaning they could technically block it.
The Chronicle asked the southern councils to formally commit to not doing so but none answered directly.
In response, a spokesperson for the North of Tyne said they did not view devo as an “us and them situation” and they were committed to maintaining strong relations across the North East.